Today, ASML Holding N.V. (ASML) experienced a significant surge in its U.S.-listed shares, jumping $42.65 or 6.24% in early trading. This increase follows the company’s announcement of better-than-expected fourth-quarter earnings and an optimistic outlook on the AI market by its CEO.
ASML, renowned for its pioneering role in the semiconductor industry, continues to hold a unique position as the sole manufacturer of machines utilizing extreme ultraviolet (EUV) lithography technology. These machines, which cost nearly $400 million each, are critical for producing the world’s most advanced AI chips, serving major clients like TSMC (TSM), which in turn supplies Nvidia (NVDA), Apple (AAPL), and other tech giants.
The company reported Q4 earnings per share of €6.85, beating market expectations by €0.13, while revenue surged 28% year-over-year to €9.26 billion, surpassing the €9.06 billion consensus. ASML’s Q4 gross margin stood at 51.7%, with net bookings totaling €7.1 billion, including €3 billion from EUV.
Looking ahead, ASML provided an optimistic Q1 outlook, forecasting revenue between €7.5 billion and €8.0 billion, exceeding the €7.2 billion consensus, with a projected gross margin between 52% and 53%. For FY25, the company reaffirmed its revenue guidance of €30 billion to €35 billion, compared to the €33.2 billion consensus, and expects a gross margin between 51% and 53%.
CEO Christophe Fouquet emphasized the pivotal role of AI in driving industry growth, pointing out that while AI’s expansion reshapes market dynamics, it does not uniformly benefit all customers. This situation, he noted, presents both opportunities and risks, as reflected in their cautious revenue outlook for 2025.
The scrutiny on ASML intensified after its last quarter’s disappointing earnings, which led to a significant drop in its stock price along with those of other chipmakers. Recent pressures on the stock were also due to new export restrictions announced by the Netherlands and the U.S., aimed at limiting China’s access to advanced chip technology. Despite these restrictions, ASML has seen a dramatic increase in sales to China, with revenue from the region jumping from €6.4 billion in 2023 to approximately €9 billion in 2024.
The market’s response to ASML’s shares was also influenced by news from DeepSeek, a Chinese company that introduced a cost-effective AI model, potentially threatening the high spending on AI infrastructure by Western tech firms. However, Fouquet dismissed these concerns, suggesting that lower costs could lead to broader AI application, thus increasing long-term chip demand.
ASML’s strong results and bullish outlook suggest fears over DeepSeek’s low-cost AI model disrupting high-end chip demand were exaggerated. ASML’s earnings precede major reports from Meta (META), Microsoft (MSFT), Tesla (TSLA), Amazon (AMZN), and Apple (AAPL), potentially setting a bullish tone for AI-linked semiconductor demand. Following Monday’s AI-related stock sell-off, ASML’s report reassured investors about the long-term growth trajectory of AI-driven semiconductor demand.
WallStreetPit does not provide investment advice. All rights reserved.
Leave a Reply